The future of Wollongong Coal’s Russell Vale Mine is uncertain.
Wollongong Coal’s plan to mine further into the Sydney drinking water catchment appears to be “totally stranded” by the findings of an independent body, according to an industry analyst. However, Wollongong Coal has played down the Planning Assessment Commission’s (PAC) most recent report, saying it has options and “the ball is in the company’s court”.
The commission’s second review into the company’s proposed expansion of its Russell Vale coal mine has found water and subsidence issues remain unresolved.
Sydney-based Institute of Energy Economics and Financial Analysis director Tim Buckley said the commission’s outcome was fair given the risks to the community were greater than the company had let on. Still, he said he held concerns about the assessment process.
“I think one of the telling things about the PAC report is they have not assessed the financial capacity of the proponent, because that’s outside of their remit, but it’s 100 per cent entirely within the remit of the NSW Government,” Mr Buckley said, as reported by ABC News.
“To me it’s just a major shortcoming in the entire review process that we are wasting government and community time assessing a project for a proponent that is effectively, according to their own auditors and their own management reports, in financial distress and unable to continue as a going concern without a continued lifeline from their parent in India.
“Because it’s a one way bet: if the project were to go ahead, the proponent were to find funding from Jindal Steel and then something goes wrong, Jindal Steel can head back to India and leave the proponent in administration and the local community will wear the cost.”
Wollongong Coal currently has no capacity to repay its debts unless it is thrown another financial lifeline by parent Jindal Steel & Power (Australia). Its future hinges on the so-called Underground Expansion Project, to mine 5 million tonnes of coal in eight new longwalls throughout five years.
Wollongong Coal now has an opportunity to respond to the independent PAC’s findings.